Update to the Titan Node - Start Up Grant

Good day everyone,

I have updated the Titan Node - Start Up Grant to reflect a new change.

All recipients of the grant must set their reward cut to 0% for the duration of the grant and must call reward every round.

After some deep thinking about the long term success of the grant I’ve decided that it needs to implement a win-win solution.

Both the grant winners and grant sponsors need to feel incentivized to participate.

By setting the reward cut to 0%, sponsors will retain their LPT inflationary earnings equal to the amount they would get from self delegating.

The small benefit to a sponsor will be the potential upside of winning tickets (although potentially very small) that a grant applicant will earn and share with the sponsor as they will likely be less diluted than if they were self delegated.

This solves the first problem of trying to maintain or encourage new sponsors to supply capital for the grant.

The other side of the coin is the grant applicant. The entire goal of the program is to encourage delegators from outside the grant sponsors and even outside of the community to select the applicant’s node as a suitable choice for delegating. There is great incentive to a new delegator to see a 0% reward cut.

This may come at a cost to the applicant as the cost to call reward still remains (although much less on Layer 2) but hopefully with more stake this provides the ability to win more tickets and the tickets should cover the cost of calling reward.

In the end this provides a win-win situation and I think the Livepeer network can continue to grow in strength because new and highly capable nodes have the ability to be activated and jump start their operations.

This program also encourages new members to take part in leadership positions and bring their unique talents to their nodes and the community.

I hope this explains the reasoning for my changes to the Start Up Grant and I hope you have a wonderful day.

Happy Transcoding :slight_smile:

Titan

Hi all,

It’s been two weeks since I made the change to the start up grant and set the required reward cut to 0%.

Since then a lot has happened including large amounts of stake chasing low fee orchestrators, high performing orchestrators being activated with their new large stake size and varying strategies on where to set fees with the new low cost of transactions on Arbitrum.

Overall the move to Arbitrum has been exciting and successful in my opinion.

One of the side effects of the change to the start up grant was the large adoption of Orchestrators also setting their cuts to 0% to stay competitive.

After talking with the community during the weekly water cooler chats and discussing with current grant sponsors, I think it is safe to say that a 0% cut will likely cause a long term negative effect on node operators.

Mainly, new operators will have a hard time paying for costs while trying to provide high quality transcoding in the initial stages of joining the network and the inability for an Orchestrator to grow their own stake in the ecosystem while operating.

For these reasons I’ve decided to take the findings from the previous update, include to opinions of the community as a whole and adjust the required maximum reward cut to 5%.

And just like any new idea, keeping things light and pivoting often will be a strength to this program as it matures. Expect more changes in the future as we continue to try empower high performing nodes and promote leadership in the Livepeer ecosystem.

Happy Transcoding :slight_smile:

Titan

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